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In Defense of Paleface Capitalism

Author: Walter Russell Mead, Henry A. Kissinger Senior Fellow for U.S. Foreign Policy
April 11, 2009
Newsweek

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The truth is often shocking, and when Brazilian President Luiz Inácio Lula Da Silva told a shocked British Prime Minister Gordon Brown--and the world press--that the financial crisis had been created by "white-skinned people with blue eyes," he spoke the truth. Actually, it's even worse than what Lula said. "White-skinned people with blue eyes" aren't just responsible for the current crisis; the blue-eyed palefaces are responsible for saddling the world with a financial system that has a built-in tendency to crash. The modern financial system grows out of a series of innovations in 17th-century Netherlands, and the Dutch were, on the whole, as Lula describes them. From the Netherlands, what the English called "Dutch finance" traveled over the English Channel, as the English borrowed Dutch ideas to build a stock market, promote global trade and establish the Bank of England, going on to build a maritime empire of commerce and sea power that dominated the world until World War II. Dutch finance became "Anglo-Saxon capitalism," but otherwise went on as before. When the British system fell apart, the center of world finance crossed the water again, and New York and Washington replaced London and Amsterdam as centers of global politics and finance.

This financial and political system is the operating system on which the world runs; the Dutch introduced version 1.0 in about 1620; the British introduced 2.0 in about 1700; the Americans upgraded to version 3.0 in 1945, and as an operating system, it works pretty well - most of the time.

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